Why am I being charged for past payroll taxes (Historical Liability Debit)?

Question

What is a "Historical Liability Debit" or "Mid-Quarter Collection"?

Answer

When you move your payroll to us partway through the year, there may still be payroll taxes from earlier pay runs that haven’t been paid yet. These are usually taxes that were calculated by your previous provider but weren’t due at the time you made the switch. 

Because we’re now responsible for filing and paying those taxes, we need to collect the unpaid amounts from you. This ensures everything is submitted on time and in compliance. This charge is called a Historical Liability Debit (formerly known as a Mid-Quarter Collection). It’s a normal part of switching providers mid-year and happens automatically during onboarding. 

Things to Know

• It’s your responsibility to contact your previous provider to request a refund for any taxes they collected but didn’t pay.
• We’ll handle submitting and paying those taxes on your behalf going forward—including any that weren’t yet due when you made the switch.
• Once you're with us, we take over responsibility for the entire quarter’s payroll taxes. This cannot be changed or transferred back.